1. Global Top-20Politica Measures of Globalization Political Engagement Technology Personal Contact Economic Integration

2. Kentucky Exports NAFTA OTHER France Braz. Germ. Japan UK $ 9.6 bill in 1999 … 9% Growth

3. Orange = Percentage of exports to the U.S. by intra-firm trade to total exports (This is NOT volume of total exports)

5. What is Globalization? Perspective of Firms and Shareholders F Are customers culturally/nationally diverse? F Large percent of foreign revenue? F Large percent of foreign assets? F Are competitors global? F Are owners, partners, suppliers global? F How big is globalization? Who’s doing it? Why? F Are all markets equally attractive? Why?

6. What is Globalization? Perspective of Workers, Consumers, and Regular Joes F Better prices and quality for products and services? F Jobs and wage rates? F Does globalization lead to “happiness?”

7. Merchandise Exports (In $bill, 1999) U.S. Germany Japan France UK Ire MexKor

8. Merchandise Imports (In $bill, 1999) U.S. Germany Japan France UK Ire MexKor

9. Foreign Direct Investment - Out (% of World Total, 1996) U.S. Germany Japan France UK

10. Foreign Direct Investment - In (% of World Total, 1996) U.S. Germ Japan France UK

11. Growth in Trade and FDI Indexed: 1950 = 100 1950 1960 1970 1980 1990 2000 1600 1200 800 400 100 Trade GDP FDI

12. Extent of Globalization for MNCs Foreign Sales as Percent of Total Foreign Assets as Percent of Total Exxon72%64% IBM57%44% Ford31%44% General Electric32%48% Citigroup35%41% Hewlett-Packard55%52%

15. Comparative Advantage F Germany: –10 units of factor inputs (labor & capital) to produce 1 keg of beer –2 units of factor inputs to produce 1 box of pretzels F United States: –15 units of factor inputs to produce 1 keg of beer; –5 units of factor inputs to produce 1 box of pretzels; F Which country should export beer? F Which country should export pretzels?

16. Comparative Advantage Germany: 10 labor  pretzels = 5 pretzels per beer beer 2 labor US: 15 labor  pretzels = 3 pretzels per beer beer 3 labor

17. Comparative Advantage Germany: 10 labor  pretzels = 5 pretzels per beer beer 2 labor US: 15 labor  pretzels = 3 pretzels per beer beer 3 labor F Germany has absolute advantage in both beer and pretzels F U.S. has comparative advantage in beer, and should specialize in and export beer to Germany

18. What is Globalization? Perspective of Workers, Consumers, Regular Joes, The Poor, Terrorists, and People Who Worry about Terrorists F Better prices and quality for products and services? F Jobs and wage rates? F Does globalization lead to happiness? F Does globalization cause or reduce poverty? F Does globalization fuel or reduce terrorism?